Novatek reports higher Q1 LNG sales, gets OK to buy Sakhalin Energy stake

Russian LNG exporter Novatek reported a 60 percent rise in its liquefied natural gas sales for the first quarter of this year, while it also received approval to buy Shell’s stake in the new operator of the Sakhalin-2 project.

Novatek said in its preliminary report the company’s LNG volumes sold on international markets rose to 2.97 bcm compared to 1.86 bcm in the first quarter last year.

The company’s preliminary total natural gas sales volumes, including domestic sales, rose by 5.2 percent to 22.22 bcm in the first quarter.

Gas sales of 19.36 bcm in Russia were almost flat, Novatek said.

Novatek’s gas production reached 20.88 bcm in the period under review, a rise of 1.2 percent when compared to 20.64 bcm in the year before.

The company’s total production rose 1.8 percent to 163 million barrels of oil equivalent.

Novatek currently exports LNG via its Yamal LNG plant and the mid-scale facility in Vysotsk.

The firm is also building the Arctic LNG 2 plant and plans to launch the first Arctic LNG 2 GBS in late 2023.

Sakhalin LNG stake

According to a government order dated April 11, Russia has approved Novatek’s purchase of Shell’s 27.5 percent stake in Sakhalin Energy LLC, the new operator of the Sakhalin LNG plant.

Novatek will pay 94.8 billion rubles ($1.15 billion) for the stake, the document shows.

Russia’s Kommersant reported last week that President Vladimir Putin will allow the transfer of the funds to Shell.

LNG Prime contacted Shell for a comment regarding the matter. A Shell spokesman declined to comment.

Shell previously said it will not take equity in the new Sakhalin LNG terminal operator.

Putin signed a decree in June last year allowing Russia to take charge of the Sakhalin-2 project due to Western sanctions imposed on Russia.

Sakhalin Energy LLC launched its operations on August 19, 2022 and the Sakhalin-2 LNG export terminal produced about 11.5 million tonnes of LNG last year.

Shell had a 27.5 percent interest in the original entity, while Russia’s Gazprom had a 50 percent operating stake. Japan’s Mitsui owned 12.5 percent stake and compatriot Mitsubishi had 10 percent in the plant.

Gazprom remains the operator of the new entity, while Mitsui and Mitsubishi won approvals from the Russian government to take stakes in the new operator.

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